I am Jason Shvili and this is my blog. I was born and raised in Canada and still live in the Great White North, but I also have roots in Israel and am extremely proud of my Israeli identity and heritage.
Whether you agree or disagree with what I have to say, please don't hesitate to post comments and tell me what you think. I look forward to hearing from all of you.

Monday, 7 March 2016

Raising Minimum Wages is Hardly Misguided

Today I read an article penned by two men from the Fraser Institute, who argued that it was wrong for governments across Canada to be hiking minimum wages (Misguided minimum wage policies hurt workers). The Fraser Institute is well-known for its conservative economic ideas. In many cases, I agree with what folks from this think-tank have to say, but in this case I think that they couldn't be more wrong.

The two co-authors of the aforementioned article argue that most people who are in minimum wage jobs do not actually come from low-income households. Many of them are young people who are still living with their parents. I wonder, has it ever occurred to the folks at the Fraser Institute that these young people are still living with their parents because they can't earn enough to live on their own? I guess not. Indeed, for a lot of compassion-less conservatives out there, low wage work is all about paying your dues. Yes, I agree that when a person begins entering the workforce, he or she cannot expect an executive-level salary. I also contend, however, that no worker, especially a young person who's trying to pay for school or at least make enough money to live out on his or her own needs to accept a wage that keeps them in perpetual poverty.

We now live in a country where good jobs with good salaries are extremely hard to come by. Instead, many people are forced to make do with precarious employment that offers no job security and no benefits. So I would say that if this is the only kind of employment that many folks can get, particularly when they're young and just starting out in the workforce, the least employers can do is pay them a living wage. Now of course, some people on the right, like the two men that wrote the article that appeared in the Toronto Sun, will always tell you that when governments raise the minimum wage, employers are less likely to hire and more likely to get rid of workers to keep costs down. I don't believe this argument for a second. In fact, I would contend that whether the minimum wage is as low as $10 per hour or as high as $20 per hour, all businesses will try to employ as few people as possible so that they can make as much profit as possible. It's just a basic principle of capitalism, people! If you want to make more money, you want less people doing more work. Is it any wonder then why multi-million or even multi-billion dollar corporations that make record profits still manage to find excuses to lay off workers?

The truth is that as long as minimum wages stay too low for people to live on, many will be trapped in a cycle of poverty. Young people in particular will be the biggest losers. Many of them will end up living with their parents well into their 30's because they can't earn enough money to live on their own. Would the folks at the Fraser Institute like to tell me how this is good for the economy? It doesn't take an economist to know that people in low-wage jobs will contribute less in taxes and won't have any disposable income to spend on anything but the essentials. Indeed, any economist will probably tell you that when people don't have money, they don't buy things, so the people who sell those things make less money, forcing them to cut back on their own purchases and lay off workers. So I just don't see how keeping wages low, especially minimum wages that are themselves usually not enough for people to live on, is going to make our economy better.